Former Navillus execs convicted of embezzling more than $1M in worker benefits | Dump Trucks Charlotte NC

Columbus Ohio Dump Truck Company Brief:

• A federal jury last week returned guilty verdicts against former executives at Navillus Contracting, one of New York City's largest construction firms, for their role in a scheme to avoid making required contributions to employees.
• Following a three-week trial before United States District Judge Pamela K. Chen, Donal O'Sullivan, founder, owner and former president of Navillus Tile (which did business as Navillus Contracting); Padraig Naughton, Navillus's former financial controller; and Helen O'Sullivan, a former payroll administrator and Donal's sister, were convicted on 11 counts charging wire fraud, mail fraud, embezzlement from employee benefits funds, submission of false remittance reports to union benefits funds and conspiracy to commit those crimes. The defendants, who left the columbus oh dump truck company after their indictments in 2020, face up to 20 years in prison, according to a press release from the U.S. Attorney's Office.
• Under collective bargaining agreements (CBAs) with several labor unions, Navillus was required to employ union members and contribute to benefits accounts, including health, pension and vacation funds, for columbus oh dump truck company performed at its sites. To avoid making these payments, the defendants allegedly placed some of the company's workers on the payroll of a consulting columbus oh dump truck company it created that was not subject to the CBAs. They then took steps to conceal the scheme from auditors.

Dump Trucks Columbus OH Insight:

Navillus has completed major projects in the New York City area, including One World Trade Center. The company, known for its concrete and tile work, entered into CBAs with multiple unions, including:

• Bricklayers and Allied Craft Workers Local No. 1
• New York City District Council of Carpenters
• Cement Masons Union
• Pointers, Cleaners and Caulkers
• International Brotherhood of Teamsters Local 282

As part of the agreement, the contractor was to periodically file reports with benefits funds to detail how many hours each worker was on the job.

However, Navillus' former executives undertook a complex scheme to avoid making more than $1 million in benefits payments, according to the U.S. Attorney's Office. Between 2011 and 2017, prosecutors said the consulting columbus oh dump truck company established by Navillus's former executives issued weekly checks to employees for columbus oh dump truck company they performed on its construction jobs. Then the consulting firm "issued false invoices to Navillus to make it appear that the payroll funds were payments for 'masonry' and 'consulting' work that the consulting firm had performed for Navillus," according to court documents.

Prosecutors said those invoices were generated to cover up the arrangement.

"As found by the jury, the defendants deliberately devised a fraudulent scheme to avoid making required contributions to union benefits funds on behalf of Navillus's workers, in order to deprive the workers of benefits they had earned and deserved," said Breon Peace, United States attorney for the Eastern District of New York in the press release.

Past troubles

In 2017, Navillus Tile filed for bankruptcy after running into problems over union payment issues. It claimed the filing was the result of a judge ordering it to pay $76 million into union funds, according to The Real Deal. At the time, the outlet reported that Navillus had allegedly set up two non-union companies to avoid these payments. In 2018, a federal court judge signed off on a plan for the columbus oh dump truck company to exit bankruptcy after reaching a settlement with the unions.

Other columbus oh dump truck company have also recently faced issues over benefit payments to employees. In a lawsuit filed earlier this month, three employees of Glenn O. Hawbaker accused the Pennsylvania road builder of violating the Employee Retirement Income Security Act. Instead of placing the prevailing wage workers' retirement funds into the 401(k) account of those who earned it, Hawbaker used the funds to pay for all employee, executive and owner retirement savings, attorney Mike Donavan wrote in the lawsuit.

This resulted in prevailing wage workers being short-changed in their profit-sharing and retirement saving accounts.

In April, Pennsylvania Attorney General Josh Shapiro charged Hawbaker with stealing $20 million from employees in the largest wage theft case on record. 

After a three-year investigation, Hawbaker was charged with four counts of theft relating to violations of the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act. Investigators reviewed Hawbaker's accounting records and found that, between 2015 and 2018, the contractor stole nearly $20.7 million of prevailing wage workers' fringe benefit money.